Barometers hit day's high; Nifty scales 13,800 mark

Domestic indices were trading at fresh intraday high after as FM Nirmala Sitharaman presented Union Budget 2021. Buying was seen in banking, auto and realty stocks. IT and pharma shares continued to see selling pressure. The Nifty scaled 13,800 mark and traded higher.

At 10:26 IST, the barometer index, the S&P BSE Sensex, jumped 721.3 points or 1.56% at 47,007.07. The Nifty 50 index surged 195.35 points or 1.43% at 13,829.45.

In broader market, the S&P BSE Mid-Cap index was up 0.38% while the S&P BSE Small-Cap index was up 0.58%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1563 shares rose and 1006 shares fell. A total of 164 shares were unchanged.

Union Budget 2021:

Finance Minister Nirmala Sitharaman began the Budget FY22 presentation by recapping some of the welfare policies announced by the Narendra Modi government for farmers, healthcare workers, etc amid the pandemic. The government stretched its resources to provide for the most vulnerable, she said, adding that the policies are equivalent to five different budgets.

The FM laid out a Rs 64,180 crore spending plan for healthcare over the next six years. This will be in addition to National Health Mission.

The Finance Ministry said a voluntary scrappage policy for vehicles will be launched, aimed at reducing vehicular pollution vehicles to undergo fitness test after 20 years for personal vehicles, 15 years for commercial vehicle to reduce vehicular pollution.

Economy:

The GST revenue collected for January 2021 till 6 PM on January 31 was Rs 1,19,847 crore. This is the highest GST revenue the government has collected since the rollout of the goods and services tax regime. The GST revenues for January is 8% higher than the revenues collected in the same month last year. In January 2020, the government had garnered around Rs 1.1 lakh crore.

Meanwhile, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index rose to 57.7 in January from 56.4 in December, to signal the strongest improvement in the health of the sector in three months. Sustained sales growth supported a further upturn in manufacturing sector output in January. The rise in production was the sixth in successive months and the quickest since last October.

Buzzing Index:

The Nifty Pharma index declined 1.08% to 12,039.05, extending its losing run to fourth trading session. The index slumped 5.63% in four days.

Dr. Reddy's Lab (down 3.61%), Torrent Pharmaceutical (down 3.11%), Lupin (down 1.85%), Alkem Laboratories (down 1.08%), Cipla (down 0.71%) and Biocon (down 0.5%) were top losers in pharmaceutical segment.

January Auto Sales:

Maruti Suzuki India added 0.84% to Rs 7268.35 after the auto major's total sales rose 4.3% to 160,752 units in January 2021 from 154,123 units in January 2020. Sequentially, however, the company's auto sales have remained flat in January 2021 as against 1,60,226 units sold in December 2020. Total domestic sales (PV+LCV) rose 0.2% to 142,604 units while total export sales rose 29.3% to 12,445 units in January 2021 over January 2020.

Escorts rose 0.54%. The total tractor sales surged 48.8% to 9,021 units in January 2021 as against 6,063 units in January 2020. Sequentially, the tractor sales rose 16.65% to 9,021 units in January 2021 as compared to 7,733 units in December 2020. Domestic tractor sales jumped 45.6% to 8,510 units in January 2021 over 5,845 units in January 2020. The tractor market continues to be strong on back of positive macro-economic factors and strong rural cash flows. The supply side situation is normalizing and is no longer expected to be a bottleneck to meet demand. However, rising inflation continues to be a worry. Exports soared 134.4% to 511 units in January 2021 from 218 units in January 2020. The announcement was made before market hours today, 1 February 2021.

Global Markets:

Asian markets were trading higher on Monday as official data released over the weekend showed manufacturing activity in China growing at a slower pace in January.

China's official manufacturing Purchasing Managers' Index came in at 51.3 in January, according to a statement by the country's National Bureau of Statistics on Sunday. In comparison, the reading for December was 51.9, remaining above the 50-level which indicates growth.

U.S. stock indexes fell sharply on Friday after COVID-19 vaccine data from Johnson & Johnson hurt sentiment, while a standoff between Wall Street hedge funds and small, retail investors weighed.

Meanwhile, new trial results from Johnson & Johnson's coronavirus vaccine disappointed some investors because it was less effective on some variants, also hurting market sentiment.

J&J said its one-dose vaccine demonstrated 66% effectiveness overall in protecting against Covid-19. The vaccine was 72% effective in the United States, 66% in Latin America and 57% in South Africa after four weeks, the company said. The vaccine, however, offered complete protection against Covid-related hospitalizations.

Worries of a short squeeze grew after an army of retail investors returned to trade shares in GameStop Corp and Koss Corp. The stocks sky-rocketed after brokers including Robinhood eased some of the restrictions they had placed on trading. The U.S. Securities and Exchange Commission warned both brokerages and social media traders that it was closely monitoring potential wrongdoing.

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